Question

describe the history and evokution of commercial banking in France.

Answer 1

Ans.

France was behind in banking at early ages ,in the beginning of modern times banking In france faced belated devlopment in comparison with other neighbouring countries such as italy and holland .

At the start of 19th century commercial banking in France was revolving around about 20 banks belonging to big and rich families of france . Although this traditional system if banking was sufficient for usual system of trades and state as well but in the later stage ,due to economic crisis several banks went bankrupt and some stopped granting credit. In the next stage banking system in France also suffered also because of world war in 1914 to 1919 . Those days were marked by moratorium on withdrawals which impacted credit image of France commercial banks in long way

The base of modern commercial banking in France was established in the year 1945 when the france government nationalised the major bank of france viz Banque de France and four other major commercial banks of France Sociate generale ,the comptoire National de Escompte de paris and the BNCI .This change in the law was the guiding principal for future commercial banking in France This law was the guiding principal to make difference between deposit bank and investment bank in France.

In the last few years Commercial banking system in France had gone changes in radical speed .

If we consider the present system in France the chief bank of the France is Bank if France which controls entire banking system of France. If we consider changes in the French banking industry in the early and late nintennth century we can say that French commercial banking went through drastic and major changes in that period which laid foundation of commercial banking in France

The reforms by French government lead to liberalisation , modernisation and expension of comptitive devlopment of financial market in France. The reforms also lessened the role of state in banking and thereby relieving them of burden of securing deposit and helping in reforms process.

All this resulted in establishment of a sound commercial banking system in France and devlopment of big commercial as well as investment banking name such as Credit Suisse, socilate genral and Bnp paribas.